Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has indicated that policymakers may resume interest-rate cuts in 2026 if the current disinflation trend continues and inflation becomes firmly anchored.
Speaking at the annual bankers’ dinner in Lagos on Friday, Cardoso said the bank’s models show sustained moderation in price pressures next year, supported by stronger domestic production, improved foreign exchange liquidity, and tighter liquidity management across the financial system.
“Our models project continued disinflation in 2026, helped by stronger domestic production, improved foreign exchange liquidity, and more disciplined liquidity management,” he said. “As inflation moderates and becomes firmly anchored, we will calibrate the policy rates in line with evolving data.”
Earlier this week, the Monetary Policy Committee held the benchmark interest rate at 27%, a decision that defied market expectations.
All economists surveyed by Bloomberg had forecast a rate cut, in line with the growing confidence that the easing cycle could resume after the bank delivered its first cut in five years at the September meeting.
Inflation has slowed sharply in recent months, helped by lower food prices and a more stable naira. Annual inflation eased to 16.1% in October from 18% in September, well below the 34% peak recorded in 2024.
The sharp decline has been partially attributed to the rebasing of the consumer price index earlier this year, which adjusted weighting methods and expenditure patterns.
Cardoso said the improvement confirms that policy measures are working but emphasised that the current inflation level remains above acceptable bounds. He reaffirmed that the central bank will continue to prioritise price stability.
“Nigeria’s economy has transitioned from crisis management to laying the groundwork for a sustainable recovery,” he said. “The Central Bank of Nigeria will continue to steer monetary policy with discipline, anchored firmly to its core mandate of price stability.”
The next Monetary Policy Committee meeting is scheduled for February 23–24, where investors will be watching closely for further signals on the timing of future policy adjustments.
